Kentucky
General Assembly

03/03/26	introduced in House to Committee on Committees (H)
03/04/26	taken from Committee on Committees (H) 1st reading returned to Committee on Committees (H) to Appropriations & Revenue (H)
03/05/26	taken from Appropriations & Revenue (H) 2nd reading returned to Appropriations & Revenue (H)
03/10/26	reported favorably, to Rules with Committee Substitute (1) taken from Rules placed in the Orders of the Day 3rd reading, passed 93-0 with Committee Substitute (1)
03/11/26	received in Senate to Committee on Committees (S)
03/16/26	to Economic Development, Tourism, & Labor (S)
03/26/26	reported favorably, 1st reading, to Consent Calendar with Committee Substitute (1) and Committee Amendment (1-title)
03/27/26	2nd reading, to Rules as a consent bill posted for passage in the Consent Orders of the Day for Tuesday, March 31 2026

Amendment	House Committee Substitute 1
Fiscal Impact Statement	Fiscal Note to House Committee Substitute 1
Summary	Retain original provisions, except remove the rural building and job creation revolving fund and related uses of the fund for the New Markets Tax Credits Program; create a new section of KRS Chapter 141 to define "approved company," "authority," and "credit"; create a refundable economic development credit against taxes imposed under KRS 141.020 or 141.040 and 141.0401; set requirements for the Department of Revenue to administer the credit; require the Department of Revenue to report to the Kentucky Economic Development Finance Authority on the credit; prohibit the information reported to be considered confidential; amend KRS 141.0205 to order the credit; amend KRS 131.190 to allow the Department of Revenue to report on the credit; amend KRS 154.12-204 to include the cost of equipment in approved costs; define "heritage county"; increase the minimum base hourly wage amount for the Bluegrass State Skills Program; amend KRS 154.12-207 to increase the skills training investment credit cap; create a separate skills training investment credit cap for trainees located in a heritage county; increase the timeframe that an approved company has to complete training programs under a Bluegrass State Skills Program; amend KRS 154.21-015 to define "heritage county"; amend KRS 154.21-017 to set a higher grant funding cap for approved projects located in a heritage county under the Kentucky Product Development Initiative Program; amend KRS 154.21-035 to include propane in the list of required utilities for a property that an eligible project occupies or is proposed to occupy under the Kentucky Product Development Initiative Program; amend KRS 154.25-010 to define "heritage county"; set a lower threshold for required jobs and eligible costs for projects located in a heritage county under the Kentucky Jobs Retention Act Program; amend KRS 154.25-030 to allow the extension of a tax incentive agreement for a jobs retention project when an approved company demonstrates that less than 75% of the incentives awarded will be claimed during the term of the agreement; allow a refundable credit of up to 1.5% of the wages paid to full-time employees maintained at a jobs retention project located in a heritage county; set a cap for the total refundable credits awarded to all approved companies under the Kentucky Jobs Retention Act Program and the Kentucky Business Investment Program at $2,000,000 per taxable year; amend KRS 154.25-040 to require reporting by the Department of Revenue and the Cabinet for Economic Development on the refundable credits claimed under the Kentucky Jobs Retention Act Program; amend KRS 154.32-010 to include research and development as an eligible company for the Kentucky Business Investment Program; expand the types of start-up costs and lease agreements allowed for economic development projects under the Kentucky Business Investment Program; define "heritage county"; increase the wage target thresholds and set a separate threshold for jobs located in a heritage county; amend KRS 154.32-020 to increase the required minimum pay for jobs created as a result of the economic development project under the Kentucky Business Investment Program; amend KRS 154.32-030 to allow the recovery of eligible costs incurred 90 days prior to receipt of preliminary approval for an economic development project under the Kentucky Business Investment Program; amend KRS 154.32-040 to allow a one-time extension for approved companies that received preliminary approval of an economic development project prior to January 1, 2023 under the Kentucky Business Investment Program; set requirements for the extension; amend KRS 154.32-070 to allow a refundable credit of up to 1.5% of the wages paid to full-time employees maintained at an economic development project located in a heritage county under the Kentucky Business Investment Program; set a cap for the total refundable credits awarded to all approved companies under the Kentucky Jobs Retention Act Program and the Kentucky Business Investment Program at $2,000,000 per taxable year; amend KRS 154.32-100 to require reporting by the Department of Revenue and the Cabient for Economic Development on the refundable credits claimed under the Kentucky Business Investment Program; amend various other sections to conform; repeal KRS 154.32-050, relating to certifcation of enhanced incentive counties; EMERGENCY.
Index Headings	Counties - Heritage county designation, county ranking Economic Development - Jobs retention project, eligible costs incurred, heritage county location Economic Development - Kentucky Business Investment Program, expansion of eligible companies and wage target thresholds Economic Development - Kentucky Product Development Initiative, maximum funding available, heritage county designation Economic Development - Refundable economic development credit, income tax Effective Dates, Emergency - Economic development, heritage counties Reports Mandated - Cabinet for Economic Development, refundable economic development credit Reports Mandated - Department of Revenue, refundable economic development credit Taxation - Income tax, refundable economic development credit Taxation - Income tax, skills training investment credit, modifications Taxation, Income--Corporate - Economic development credit, refundable Taxation, Income--Individual - Refundable economic development credit, creation Wages And Hours - Wage requirements, certain economic development projects Workforce - Minimum base hourly wage requirements, economic development project purposes Workforce - Minimum number of full-time employees, heritage county designation, economic development incentives Workforce - Skills training investment credit, increase in credit amount per trainee

Amendment	Senate Committee Substitute 1
Summary	Delete original provisions; create a new section of KRS Chapter 141 to create a refundable economic development credit for the Kentucky Product Development Initiative and the Kentucky Business Investment Program subject to the approval of the Kentucky Economic Development Finance Authority; amend KRS 141.0205 to add the refundable economic development credit to the priority of tax credits taken by a taxpayer; create a new section of Subchapter 12 of KRS Chapter 154 to create the heritage community revolving fund to provide financial assistance to support New Markets Development Program Tax Credit applications to be administered by the Cabinet for Economic Development and subject to the approval of the Kentucky Economic Development Finance Authority; amend KRS 154.12-204 to add the definition of "heritage county" and amend the definition of "minimum base hourly wage" from 150% to 200% for a company in a heritage county and to 300% for a company in any other county; amend KRS 154.12-207 to change the Bluegrass State Skills Corporation's occupational upgrade training or skills upgrade training credit amount not to exceed $5,000 per trainee for an approved company in a heritage county and $4,000 per trainee for an approved company in any other county and to change the 1 year to 3 year limit on completing training from the date of approval by the Bluegrass State Skills Corporation; amend KRS 154.21-015 to add the definition of "heritage county"; amend KRS 154.21-017 to increase maximum funding available to $2,500,000 for an approved project in a heritage county under the Kentucky Product Development Initiative; amend KRS 154.21-035 to include propane in the assessment of adequate utilities; amend KRS 154.25-010 to change definition of "eligible company" to include a minimum of 250 full-time persons for a project located in a heritage county and add the definition of "heritage county" under the Kentucky Jobs Retention Act; amend KRS 154.25-030 to allow an extension of the 10 year time period if less than 75% of the incentives will be claimed under the term of the agreement and to provide a refundable tax credit based on a tiering system ranking all of Kentucky's counties into 4 tiers; amend KRS 154.25-040 to add new reporting requirements for the Department of Revenue to the Cabinet for Economic Development and for the cabinet to annually report to the Governor and the Legislative Research Commission on the economic development wage credits received; amend KRS 154.25-050 to conform; amend KRS 154.32-010 to add "heritage county", amend "start-up costs" to include certain software; and "wage target" from 125% to 200% for a company in a heritage county and from 150% to 300% for a company in any other county under the Kentucky Business Incentives program; include research and development companies or out of state companies involved in economic development projects near Tier IV counties, with another state that has reciprocal provisions with Kentucky, with a minimum 250 full-time jobs, and meets other criteria as the Kentucky Economic Development Finance Authority may require; amend KRS 154.32-020 to increase the percentage of federal minimum wage paid to 90% of new full-time employees from 125% to 200% in heritage counties and from 150% to 300% in other counties and to provide a refundable economic development credit based on a tiering system ranking all of Kentucky's counties into 4 tiers; amend KRS 154.32-030 to allow recovery of eligible costs incurred 90 days prior to receiving preliminary approval; amend KRS 154.32-040 to allow a one-time extension for projects approved prior to January 1, 2023, if approved company has received less than 75% of the incentives under the agreement but no more than maximum amount of incentives under the agreement; amend KRS 154.32-050 to create a 4 tier ranking system for all Kentucky counties based on a 5 year average of a county's unemployment rate and population ranking under the Kentucky Product Development Initiative; amend KRS 154.32-070 to provide a refundable economic development creditbased on a tiering system ranking all of Kentucky's counties into 4 tiers; amend KRS 154.32-100 to add new reporting requirements for the Department of Revenue to the Cabinet for Economic Development and for the cabinet to annually report to the Governor and the Legislative Research Commission on the refundable economic development credits received; amend KRS 154.12-100 to include regional airports that serve the Commonwealth; amend KRS 131.190, 141.383, 148.851, 148.853, 154.20-230, 154.20-236, 154.32-090, 154.34-010, 154.61-010, 154.61-020, and 164.6021 to conform; encourage the Cabinet for Economic Development to conduct an impact and feasibility study and, if completed to be submit it to the Interim Joint Committee on Economic Development and Workforce Investment by December 1, 2028; EMERGENCY.
Index Headings	Economic Development - Kentucky economic development incentive programs, tiered county system, establishment Effective Dates, Emergency - Kentucky economic development incentive programs, tiered county system, establishment Funds - Heritage community revolving fund, Kentucky Economic Development Finance Authority Local Government - Kentucky economic development incentive programs, tiered county system, establishment Small Business - Kentucky economic development incentive programs, tiered county system, establishment State Agencies - Cabinet for Economic Development, Kentucky economic incentive programs, tiered county system Taxation - Kentucky economic development refundable credit program, tiered county system, establishment Taxation, Income--Corporate - Kentucky economic development refundable credit program, tiered county system, establishment

Amendment	Senate Committee Amendment 1
Sponsor	P. Wheeler
Summary	Make title amendment.
Index Headings	Title Amendments - HB 869/GA